Energy issues drive governor

Rounds supports TransCanada pipeline, ethanol, refinery, conservation

Rounds supports TransCanada pipeline, ethanol, refinery, conservation

January 09, 2008|By Bob Mercer, American News Correspondent

PIERRE - How many workers does it take to change the light bulbs in every state government building? Just one, if that person happens to be the governor. Gov. Mike Rounds used his State of the State address on Tuesday to call for more production of electricity and fuels - both hydrocarbon and renewable - in South Dakota, while also asking that citizens, businesses and governments become more efficient in their consumption of energy. The Republican governor told members of the Legislature on the opening day of their 2008 session that he wants South Dakota to become energy independent. Toward that goal, he announced a variety of steps either under way already or on the drawing board, including eliminating the use of traditional incandescent light bulbs in state buildings. Rounds said incandescent bulbs will be dropped from state contract purchases after this month in favor of mercury lamps, which are costlier but also are cooler-burning and consequently use less electricity. He's also switching the work hours for cleaning crews, so that they get state buildings done during the day and the interior lights can be turned off at night. He wants bio-fuels to get a 5 percent preference on state contracts. And, he said, 108 more vehicles that burn E-85 fuel are on order as an addition to the 809 E-85 rigs already in the state motor pool. Pipeline, refinery: Rounds said he supports the TransCanada pipeline project, which is under permit review by the state Public Utilities Commission. TransCanada wants to deliver crude oil from Alberta to points in Illinois and Oklahoma, with the transmission line running through South Dakota, including Marshall and Day counties in the Aberdeen area. He said the 590,000 barrels of oil that TransCanada plans to ship daily would help reduce the U.S. demand for oil overseas, such as from the Middle East and Venezuela. Rounds also showed interest in Hyperion selecting South Dakota as the site to build the nation's first new oil refinery since 1976. The governor, however, didn't propose that the Legislature offer any additional incentives. The TransCanada project could supply a Hyperion refinery, although TransCanada officials last year said emphatically their pipeline isn't dependent upon a new refinery. “They've put us on a short list,” Rounds told reporters on Monday about Hyperion's decision where to locate. Hyperion has already taken initial steps to receive a state air-quality permit in South Dakota. “I told them,” Rounds said about his conversation with Hyperion representatives, “we would not hold up this plan with red tape. Also, I told them we would not cut any corners.” Fuel supplies: The governor told legislators on Tuesday that South Dakota ran dangerously low on gasoline and diesel fuel during harvest time last year. He said that only one of seven pipelines which supply fuel to South Dakota actually had any to deliver at one point in September, and that for 12 hours one day there were service stations where the gas and diesel pumps went dry. The proposed site for the Hyperion refinery is outside Elk Point, just down the road from Vermillion where state Sen. Ben Nesselhuf, a Democrat, lives. “I'm glad he (the governor) is going to hold their feet to the fire,” Nesselhuf said, adding that he hopes legislation will be introduced by the governor requiring Hyperion to live up to promises being made. “I don't know if we'll see it. I look forward to working with him on it,” Nesselhuf said. Ethanol: While he was a state senator, Rounds wasn't viewed as the friendliest legislator for the ethanol industry. Now that he's governor, he has become a supporter and promoter, as ethanol production in South Dakota has tripled in the past six years, which include his first five in office. Rounds said Tuesday that ethanol production reached 625 million gallons in South Dakota during 2007, while motorists purchased only 420 million gallons. He said new federal mandates requiring national production of ethanol to increase five-fold within a few decades present “substantial market opportunities” for South Dakota. “We have to take advantage,” he said. Other issues: Rounds also spoke about wind power and its dependence upon additional transmission lines to carry the electricity to Midwest markets. One of those new lines would be created as part of the Big Stone II coal-fired power plant proposed in Grant County. That project currently remains under review by Minnesota regulators. The governor also plans to offer legislation this winter that would give a 2-cent tax exemption per gallon on purchases of bio-diesel fuel. The details remain to be seen. According to state Sen. Jim Peterson, D-Revillo, the plan discussed with some legislators calls for a temporary half-cent tax increase on other diesel fuel to offset the revenue lost to the bio-diesel exemption. Peterson, one of the Legislature's leaders in renewable energy issues, said the bio-diesel proposal carries various other conditions and would expire after a certain production level was met. “It's just a temporary one,” he said. The governor didn't discuss other possible new sources of electricity, such as nuclear power, on Tuesday, but Rep. Hal Wick, R-Sioux Falls, said Rounds is on the right path by emphasizing South Dakota's potential as an energy exporter. “We have to keep working on it, and I think he's doing it. We want to have every source of energy we can get, because we can sell it. We're in the middle of the nation and we're in the middle of the world.”